The Flores Second Circuit Arbitration Decision and the Scope of the FAA
Introduction
The Flores Second Circuit arbitration decision, Flores v. N.Y. Football Giants, Inc., No. 23-1185-cv, slip op. (2d Cir. Aug. 14, 2025), may be a watershed moment in federal arbitration law. In rejecting the National Foot Ball League (“NFL”)’s attempt to compel arbitration, the court held that the league’s dispute resolution provision—vesting unilateral authority in the Commissioner, an executive officer of one of the arbitration opponent’s adversaries —was “arbitration in name only” and thus unprotected by the Federal Arbitration Act (FAA). Beyond its immediate implications for Brian Flores’s racial discrimination claims, the ruling could (and should) reshape how courts evaluate the independence, neutrality, and fundamental fairness of dispute resolution agreements that are alleged to be FAA-governed arbitration agreements, particularly in employment and sports law contexts.
The Flores Second Circuit decision, authored by United States Senior Circuit Judge José A. Cabranes, may have far reaching consequences concerning the scope of the Federal Arbitration Act, the enforceability of dispute resolution agreements, and the viability and applicability of the “effective vindication” doctrine. It also has the potential to—and should—change for the better the legal landscape governing post-award evident partiality challenges. (For discussions of evident partiality see here, here, here, here, and here.)
In Flores the Court held NFL coach Brian Flores was not required to arbitrate his 42 U.S.C. § 1981 racial discrimination claims against the NFL, the New York Football Giants, the Denver Broncos, and the Houston Texans. Flores agreed to the NFL’s dispute resolution scheme, which was set forth in Constitution and Bylaws of the National Football League (the “NFL Constitution”) and incorporated by reference into two of Flores’s club-specific employment agreements.
That NFL dispute resolution scheme purported to designate the NFL Commissioner— who runs the league and works for the franchise owners Flores accused of race discrimination—as the arbitrator. The Second Circuit held that “Flores’s agreement under the NFL Constitution to submit his statutory claims against the Broncos and the NFL to the unilateral substantive and procedural discretion of the NFL Commissioner—the principal executive of one of Flores’s adverse parties—provides for arbitration in name only and accordingly lacks the protection of the FAA.” Slip op. at 28 (emphasis added). As such it could not be enforced under the FAA. See Slip op. at 24.
For essentially the same reasons, the Court independently held that “Flores’s agreement to submit his statutory claims against the Broncos and the NFL Commissioner is unenforceable because the agreement fails to guarantee that Flores can ‘vindicate [his] statutory cause of action in [an] arbitral forum.’” Slip op. at 24, 26, 28-29 (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 615, 637 (1985)).
The Flores Second Circuit decision ruled that the “same unprotected and unenforceable agreement also cannot be used to compel Flores to arbitrate his claims against the Giants and Texans or related claims against the NFL.” Slip op. at 29. The Court therefore affirmed: (a) the district court’s order denying the motions to compel arbitration against the Broncos, Giants, Texans, and the NFL; and (b) the district court’s denial of the motion for reconsideration.
The Flores Second Circuit Arbitration Decision: Background
Brian Flores, currently the defensive coordinator of the Minnesota Vikings, has coached in the National Football League (“NFL”) since 2008. His employment history includes positions with the New England Patriots (2008–2018), Miami Dolphins (2019–2021), Pittsburgh Steelers (2022), and Minnesota Vikings (2023–present). Slip op. at 6.
The NFL is an unincorporated membership association comprised of 32 clubs or franchises (teams). Its affairs are governed by the NFL Constitution and Bylaws (“NFL Constitution”), which purports to authorize the Commissioner to, among other things, interpret and enforce league rules, discipline clubs and employees, and exercise “full, complete, and final jurisdiction and authority to arbitrate” disputes, including those “between any . . . coach . . . and any member club or clubs”. Slip op. at 6-7 (quoting NFL Constitution, art. VIII, J.A. 603-12).
When Flores was employed by the New England Patriots (2008-2018), his contract contained two arbitration-related provisions. First, a club-specific arbitration agreement purported to require that “all matters in dispute between Employee and the Club . . . shall be referred to the NFL Commissioner for binding arbitration in accordance with the NFL’s Dispute Resolution Procedural Guidelines.” Slip op. at 10 & n.12 (citation omitted). Second, Flores agreed “to comply at all times with, and to be bound by, the NFL Constitution,” which his club-specific employment agreement incorporated by reference “in [its] present form and as amended from time to time hereafter. Slip op. at 10 & n.13.
In 2019, while under contract with the Patriots, Flores interviewed for the Denver Broncos’ head coach position but was not hired, allegedly because of racial discrimination. Slip op. at 9-10. Later that year, he became head coach of the Miami Dolphins. Slip op. at 9-10. After his termination by the Dolphins in January 2022, Flores interviewed with the New York Giants and Houston Texans, again unsuccessfully. Slip op. at 11. He was subsequently hired by the Pittsburgh Steelers as senior defensive assistant and linebackers coach. His Steelers contract, like his Patriots contract, contained both a club-specific arbitration agreement and an incorporation-by-reference of the NFL Constitution. Slip op. at 11.
Flores alleges that the Broncos, Giants, and Texans engaged in racially discriminatory hiring practices, in violation of 42 U.S.C. § 1981 and other laws. He also asserts related claims against the NFL. Slip op. at 9-10, 11-12. The existence, applicability and enforceability of the arbitration agreements in his Patriots and Steelers contracts—including, by incorporation, the arbitration provisions of the NFL Constitution—became central to the Court’s decision whether these claims should be heard in court or in arbitration.
Second Circuit Flores Arbitration Decision: Procedural history
In February 2022, Flores commenced a putative class action in the Southern District of New York against the NFL, the Denver Broncos, New York Giants, and Miami Dolphins, alleging racial discrimination under federal, state, and local law. Slip op. at 7. An amended complaint in April 2022 added the Houston Texans as a defendant and joined two other putative class-representative plaintiffs (Steve Wilks and Ray Horton) asserting similar claims against other clubs. Slip op. at 7-8.
The NFL and its member clubs moved to compel arbitration, relying on the plaintiffs’ employment agreements. Slip op. at 7-8. They argued that the club-specific arbitration provisions, together with the NFL Constitution (incorporated by reference), required that all claims be arbitrated, and that Flores and the others were estopped from resisting arbitration of their claims against the NFL itself.
On March 1, 2023, the U.S. District Court for the Southern District of New York (Caproni, J.) compelled arbitration of Flores’s claims against the Dolphins, Wilks’s claims against the Arizona Cardinals, and Horton’s claims against the Tennessee Titans, along with related claims against the NFL. Slip op. at 9. But the district court denied the motion to compel Flores to arbitrate its claims against the Broncos, Giants, and Texans, and its related claims against the NFL.
Broncos/NFL claims: Flores’s claims against the Broncos and the NFL “plainly fell outside [Flores’s] club-specific arbitration agreement with the Patriots,” so the district court considered whether the NFL Constitution (which the Patriots employment agreement incorporated by reference, applied to those claims and could be enforced to require Flores to arbitrate them. Slip op. at 11. The district court determined that the NFL Constitution arbitration provision covered those claims but was not enforceable because it was “illusory” under Massachusetts law. It was illusory, the district court ruled, because the NFL and its clubs were authorized to amend unilaterally the NFL Constitution. Slip op. at 11. The Broncos/NFL claims thus had to be litigated.
Giants/Texans/NFL Claims: The defendants asserted that Flores’s Steelers contract covered his Giants and Texans claims. But the district Court ruled that the defendants did not establish Flores had entered a valid arbitration agreement because the document they submitted to the district court was not signed by the NFL Commissioner. Slip op. at 12. Accordingly, Flores had not, according to the district court, entered into a valid arbitration agreement covering those claims. Id.
The defendants moved for reconsideration, asserting that the Commissioner had approved the Flores Steelers contract on June 17, 2022, and supplying the Court with a signed version of that agreement. The district court denied the motions for reconsideration on July 25, 2023. Slip op. at 12.
The NFL, Broncos, Giants, and Texans timely appealed. Their appeal was limited to the order denying their motion to compel arbitration of Flores’s claims against them. Slip op. at 13. They also appealed the district court’s order denying reconsideration. Id. Plaintiffs cross-appealed the portion of the order compelling arbitration of Flores’s claims against the Dolphins, Wilks’s claims against the Cardinals, and Horton’s claims against the Titans, but the Second Circuit, in a prior order, dismissed that cross-appeal for lack of jurisdiction. Slip op. 13 & n.22.
On August 14, 2025, the Second Circuit affirmed across the board. See slip op. at 28-29.
Flores: Discussion and Legal Analysis
The Court divided its discussion into three sections. First, whether, based on Flores’s Patriots employment agreement, which incorporated the NFL Constitution arbitration provisions, the district court correctly denied the motion to compel arbitration of Flores’s Denver Broncos and related NFL claims. Second, whether the district court erred by denying the motion to compel arbitration of Flores’s New York Giants, Houston Texans, and related-NFL claims. Third, whether the district court abused its discretion by denying the motion for reconsideration. Slip op. at 14.
Did the District Court Err by Denying Flores’s Claims Against the Broncos and Related Claims Against the NFL?
The Flores Second Circuit arbitration decision focused on a foundational question: did dispute resolution provisions of the NFL Constitution constitute an agreement to arbitrate entitled to the protections of the FAA? Answering that question required consideration of the scope of the FAA. See slip op. at 15.
Why the NFL Constitution’s Dispute Resolution Clause Was “Arbitration in Name Only”
The Court explained that “not every self-declared ‘arbitration agreement’ or contractual provision within such an agreement is embraced by the FAA’s [enforcement] mandate.” Slip op. at 15.
Referring to the U.S. Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana, 596 U.S. 639, 653 (2022), the Second Circuit said the U.S. Supreme Court “has recently reiterated that the FAA’s mandate is limited to the enforcement of actual ‘arbitration agreements’—meaning ‘a specialized kind of forum-selection clause that posits not only the situs of suit but also the procedure to be used in resolving the dispute.’” Slip op. at 15 (quoting Viking River, 596 U.S. at 653 (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 (1974)). The “rigorous enforcement” of FAA arbitration agreements, said the Court, “has long presumed traditional arbitral practice and the norm of bilateral arbitration as our precedents conceive of it.” Slip op. at 16 (citations and quotations omitted).
Agreements that do not Qualify as Arbitration Agreements are Not protected by the FAA and are Subject to Invalidation, Including under the Effective Vindication Doctrine
From the “basic principle—‘that the FAA requires only the enforcement of provision[s] to settle a controversy by arbitration’—” the Court drew the logical corollary: “agreements beyond the scope of this tenet are unprotected by the FAA and potentially vulnerable to invalidation.” Slip op. at 16 (quoting Viking River, 596 U.S. at 653 n.5) (cleaned up). Relying in part on Circuit Judge Lawrence VanDyke’s concurring opinion in Heckman v. Live Nation Ent., Inc., 120 F.4th 670, 689-90 (9th Cir. 2024) (VanDyke, J., concurring), the Court explained that various “alternatives to adjudication for resolving disputes[]” exist, “including not only arbitration but any number of other mechanisms, such as dueling, flipping a coin, or settling controversies with a game of ping pong.” Slip op. at 16 (citing 120 F.4th at 689-90 (VanDyke, J., concurring)). But only arbitration is “protected by the FAA,” and “neither a duel nor a coin flip nor a game of ping pong is an arbitration, even if labeled as one.” Slip op. at 17.
“When[,]” as here, rights under a statute are implicated, “such a vulnerability can turn fatal.” Slip op. at 17. Under the “‘effective vindication’ doctrine,” said the Court, “even FAA-protected arbitration agreements are subject to invalidation when they” prospectively waive “‘a party’s right to pursue statutory remedies.’” Slip op. at 17 (quoting Mitsubishi Motors Corp., 473 U.S. at 637 (emphasis in original)). “Put simply,” said the Court, “an agreement to submit statutory claims to a non-arbitral process may” constitute a prospective “‘contractual waiver of substantive rights and remedies’ that falls outside FAA protection and is unenforceable under the foundational principles of the effective vindication doctrine.” Slip op. at 17 (quoting Viking River, 596 U.S. at 653).
Flores’s Claims Against the Broncos and Related NFL Claims were Covered by the NFL Constitution’s Dispute Resolution Provision
Flores’s Patriots contract (in effect when he interviewed with the Broncos) incorporated by reference the NFL Constitution. Article VIII, § 8.3 gave the Commissioner “full, complete, and final jurisdiction and authority to arbitrate” disputes between coaches and clubs.
On appeal, neither side disputed that Flores’s claims fell within the scope of this provision. And the Court accordingly concluded that Flores would was “estopped from avoiding the arbitration of these claims under applicable [Massachusetts] state law.” Slip op. at 18 (citation omitted).
The dispute instead centered on enforceability. While the district court did not enforce the NFL dispute resolution because it concluded it was “illusory” under Massachusetts law, Flores argued for affirmance on “two potential alternative grounds[,]” unconscionability under Massachusetts law and the effective vindication doctrine. Slip op. at 18-19. So although the NFL Constitution covered Flores’s claims, Flores argued that the NFL dispute resolution provision was not enforceable to require resolution of those claims outside a judicial forum and that the provision “preclude[d] the effective vindication of his statutory rights.” Slip op. at 18-19.
But the Court went a step further and concluded that affirmance was required on two alternative federal grounds—the agreement was arbitration in name only and lacked the protection of the FAA and, in any event, the agreement failed to guarantee that Flores could vindicate statutory rights in an arbitral forum. Slip op. at 19. This obviated the need to address the state law questions presented by the district court’s decision and Flores’s unconscionability argument. See slip op. at 19.
Independence and Neutrality: Core Requirements Confirmed by the Flores Decision
The court held that this “arbitration” mechanism was not entitled to FAA protection for two reasons: lack of an independent forum and the absence of agreed procedure. Of these, the lack of an independent forum appears to have principally driven the Second Circuit’s court’s decision, as we shall see.
Flores’s Agreement was not Protected by the FAA
The NFL Constitution’s dispute resolution provision, said the Court, “fails to bear even a passing resemblance to ‘traditional arbitral practice.’” Slip op. at 19 (quoting Viking River, 596 U.S. at 658). It does not provide an independent arbitral forum, bilateral dispute resolution, or any procedure. By purporting to require submission of Flores’s “claims to the unilateral substantive and procedural discretion of the ‘principal executive officer’ of one of [Flores’s] adverse parties, the NFL.” Slip op. at 20. That NFL Commissioner also “enjoys authority over and owes responsibilities to member clubs.” Slip op. at 20 n.48 (citation omitted).
To be sure, the dispute resolution provision was labelled “arbitration,” but that does not automatically make it arbitration as contemplated by the FAA. See slip op. at 20. Pulling no punches, the Court said “[t]he NFL Constitution’s arbitration provision is ‘unworthy even of the name of arbitration’ and thus falls outside the FAA’s protection. Slip op. at 20 (quoting Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 940 (4th Cir. 1999)).
Lack of Independent Forum
The Court first focused on the how the NFL Consititution did not “provide an independent arbitral forum for bilateral dispute resolution.” Slip op. at 20. “‘[T]raditional arbitration practice’ and ‘the norm of bilateral arbitration as our precedents conceive of it[,]’” said the Court, “is that even while arbitration is a matter of contract, an arbitral forum is an independent forum that is separate from the parties to the dispute.” Slip op. at 20 (emphasis in original). The Court reasoned that “an arbitration agreement that prevents parties from submitting their disputes to an independent arbitral forum, and that instead compels one party to submit its disputes to the substantive and procedural authority of the principal executive officer of one of their adverse parties, is an agreement for arbitration in name only.” Slip op. at 21. Structurally, explained the Court, such an agreement lacks the independence of the arbitrator from the parties that inheres in “the FAA’s conception of arbitration.” Slip op. at 21.
The Court drew further support for its argument by referencing 9 U.S.C. § 10(a)(2), explaining that “[t]he FAA authorizes federal courts to vacate arbitration awards ‘where there was evident partiality . . . in the arbitrators. . . .” Id. (emphasis in original). “It would[,]” the Court said, “make little sense if the same statute nonetheless required the courts to compel parties to arbitrate their claims in a forum that is indisputably partial.” Slip op. at 21.
The Court wrapped up its discussion of independence by concluding that “the agreement betrays the norm of bilateral dispute resolution and, quite simply, could not be called with a straight face a ‘forum-selection clause.’” Slip op. at 22 (citing Viking River, 596 U.S. at 653 (quotation omitted)).
Absence of Agreed Procedure
The Court next focused on the NFL dispute resolution provisions failure “to provide ‘the procedure to be used in resolving the dispute.’” Slip op. at 22 (quoting Viking River, 596 U.S. at 653 (quotation omitted)). The arbitration proponents argued that Section 8.5 of the NFL Constitution authorized the NFL Commissioner to “establish policy and procedure in respect to the provisions of the Constitution and Bylaws[,]” and that, accordingly, the Commissioner was authorized to dictate unilaterally arbitration procedures. Slip op. at 22.
But the Court explained that the NFL Constitution does not incorporate by reference the NFL’s Dispute Resolution Procedural Guidelines, even though those Guidelines were “incorporated into Flores’s club-specific arbitration agreements that are not at issue in this appeal.” Slip op. at 22. The Court concluded that “in matters of procedure, as in matters of substance, the NFL Constitution’s arbitration provision bears virtually no resemblance to arbitration agreements as envisioned and as protected by the FAA.” Slip op. at 22-23.
The Court rejected the NFL Commissioner’s attempt to “exercise his unilateral discretion to boot-strap a more plausible arbitration process. . . .” Slip op. at 23. Once appellate briefs were submitted the arbitration proponents informed the Court that the NFL Commissioner had appointed one Peter C. Harvey to arbitrate the claims in place of the Commissioner. But the Court said “the late unilateral designation of an adviser to the NFL as arbitrator neither provides for an even facially independent arbitral forum, nor remedies the Commissioner’s unilateral contractual authority over both the substance of Flores’s statutory claims and the procedures governing their alleged ‘arbitration.’” Slip op. at 23. The Court further reasoned that the unilateral designation of Harvey, an NFL adviser, by the Commissioner, “represents a further extension of his unilateral power rather than its remedy.” Slip op. at 24 (citations omitted).
Court’s Summary of Why the Agreement is not Protected by the FAA
Summing up its ruling concerning why the agreement was “arbitration in name only,” the court said the agreement “is fundamentally unlike any traditional arbitration provision protected by the FAA, in which courts are appropriately cautioned to avoid presuming at an early stage ‘that the parties and arbitral body conducting a proceeding will be unable or unwilling to retain competent, conscientious, and impartial arbitrators.’” Slip op. at 24 (quoting Mitsubishi Motors Corp., 473 U.S. at 634). “Because[,]” said the Court, “the FAA’s mandate is limited to enforcement of actual ‘arbitration agreements,’” the agreement “enjoys no special deference under the FAA.” Slip op. at 24 (citing Viking River, 596 U.S. at 653).
The Court further explained that its holding about the agreement’s lack of protection under the FAA was “an independent reason to affirm the District Court’s order denying the motion to compel arbitration of Flore’s claims.” Slip op. at 24. It clarified that the lack of FAA protection holding and effective vindication holding were closely related, and were essentially based on the inherently biased nature of the arbitration forum:
Although the effective vindication doctrine is an independent reason to affirm the District Court’s order denying the motion to compel arbitration of Flores’s claims, it is closely linked with our conclusion that the FAA does not protect the NFL Constitution’s arbitration agreement. Both conclusions rely largely on the fact that the arbitral forum guaranteed by the NFL Constitution is inherently biased.
Slip op. at 24 n.65 (emphasis added).
The Court also distinguished National Football League Mgmt. Council v. National Football League Players Ass’n, 820 F.3d 527 (2d Cir. 2016) (“NFL Council”). It said NFL Council involved “a ‘very limited’ review of an arbitration award under the Labor Management Relations Act [“LMRA”], not the FAA.” Slip op. at 27 n.72 (quotation and citations omitted). “[T]he rights at issue [there]. . .[,]” continued the Court, “were contractual not federal statutory rights, and they were subject to arbitration according to the terms of a collectively bargained for arbitration agreement.” Slip op. at 27 n.72.
What the Court did not discuss was that in NFL Council the arbitration opponent (the union, the NFL Players Association (“NFLP”)), argued that the arbitrator was, under the FAA, guilty of “evident partiality” because the Commissioner was designated as the arbitrator had a substantial stake in the outcome.
The parties in NFL Council agreed to allow the Commissioner to preside over disputes knowing that in the Commissioner would have the right to determine what constituted “conduct detrimental” to the sport and thus the power to impose a penalty on Tom Brady for his alleged participation in the “deflategate” scandal. See NFL Council, 820 F.3d 548 (quotation and citation omitted). The parties knew that the Commissioner “ha[d] a stake both in the underlying discipline and in every arbitration brought pursuant to Section 1(a)” of the operative agreement. Id.
The Court, with one Judge dissenting, rejected the evident partiality claim because “arbitration is a matter of contract, and consequently, the parties . . . can ask for no more impartiality than inheres in the method they have chosen.” Id. And in NFL Council, “[h]ad the parties wished to restrict the Commissioner’s authority, they could have fashioned a different agreement.” Id.
It is extremely hard to square the 180 degree different outcomes presented by Flores and NFL Council. To do so on the basis that one involved federal statutory rights while the other involved contract rights under a federal statute (the LMRA) seems questionable. The existence or nonexistence of federal statutory rights is not relevant to the independent claim that a contract is not entitled to FAA protection: The pre-dispute selection of a specific, biased and interested decision maker establishes the agreement is not for arbitration. Further, NFL Council held there was no evident partiality based on the FAA, and did not cite the LMRA—which says nothing expressly about evident partiality—as the source of its evident-partiality holding.
The Effective Vindication Doctrine in the Flores Second Circuit Arbitration Decision
The Court held “that the agreement is plainly unenforceable under the most basic principles of the effective vindication doctrine.” Slip op. at 25. That doctrine provides that arbitration agreements are unenforceable if they operate as a prospective waiver of “the right to pursue statutory remedies.” Slip op. at 25 (citation omitted; emphasis deleted).
Noting that there was “extended judicial debate” about the relationship between the FAA’s mandate to rigorously enforce arbitration agreements and the right to pursue statutory remedies, the Court did not need to “reach the outer bounds of potential exceptions to the FAA because the alleged arbitration provision. . . before us plainly fails to provide Flores access to an arbitral forum.” Slip op. at 35 (citation and quotation omitted; cleaned up). Because “for the same reasons that the alleged arbitration agreement lacks FAA protection, it also functions as a prospective waiver of a party’s right to pursue statutory remedies.” Slip op. at 26 (citations and quotations omitted; emphasis in original).
“An arbitration agreement is only enforceable[,]” explained the Court, if the “litigant effectively may vindicate its statutory cause of action in the arbitral forum.” Slip op. at 26 (citations and quotation omitted; emphasis in original).
Flores’s Agreement was not Enforceable under the Effective Vindication Doctrine
The purported arbitration agreement here could not be enforced because it required Flores to submit to the “unilateral discretion of the executive of one of ]Flores’s] adverse parties, without an independent arbitral forum under (quotation and citations omitted). The NFL dispute resolution provision denied Flores “arbitration in any meaningful sense of the word,” and the Court accordingly held it was unenforceable. Slip op. at 26-27 (citation and quotation omitted).
Did the District Court Err by Denying the Motion to Compel Arbitration of Flores’s Giants, Texans, and Related NFL Made Under the Steelers Agreement?
The answer was yes. Flores’s Steelers Agreement (executed after his termination by the Dolphins) contained both a club-specific arbitration clause and incorporation of the NFL Constitution. The district court originally found the contract unenforceable because the copy Flores originally submitted was not signed by the Commissioner. The Second Circuit did not have to reach that issue because the Steelers agreement incorporated the same NFL Constitution dispute resolution provision the Court had already deemed unenforceable. Thus, irrespective of the signature issue, the result was the same: Flores’s claims were not arbitrable.
Did the District Court Err by Denying the Motion for Reconsideration?
The NFL and clubs argued that the district court erred by refusing to reconsider after they supplied a signed version of the Steelers agreement, but the Second Circuit disagreed. Even were the Steelers agreement initially supplied on the motion to compel properly executed, the outcome would have been the same: no arbitration. The district court therefore did not abuse its discretion by denying the motion for reconsideration.
Implications of the Flores Second Circuit Arbitration Decision for Practitioners
For practitioners, the Flores Second Circuit arbitration decision’s lessons are fivefold, four of which are fairly self-evident. First, when enforcing arbitration clauses, one must carefully examine whether the provision truly creates an arbitral forum as envisioned by the FAA. Second, when drafting arbitration provisions, clarity, neutrality, and fundamental, procedural fairness are essential. Labelling something “arbitration” is not enough. Where one party’s executive holds unilateral substantive and procedural authority over the dispute, the agreement will likely be found unenforceable. Independence of the decisionmaker is a baseline requirement.
Third, the effective vindication doctrine remains vital, and after Flores that vitality may be waxing. Courts will not enforce arbitration clauses that function as prospective waivers of statutory rights. Agreements must allow employees (and other parties) to meaningfully vindicate federal rights in an arbitral forum.
Fourth, for practitioners challenging arbitration, Flores underscores the value of scrutinizing not only the existence of an arbitration agreement, but also its structure, arbitral independence and disinterestedness, and bilateral procedural fairness.
Fifth—and less obviously—Flores strongly suggests that Courts should take a closer look at how evident partiality issues are resolved in cases where the post-dispute selection of one or more neutral arbitrators is contemplated. Most FAA-governed arbitration agreements fall into this pre-dispute category.
The Flores Second Circuit arbitration decision makes mandatory the independence and disinterestedness of arbitrators appointed in an agreement. But the importance of these neutrality attributes is at least as important, if not more so, in cases where parties contract pre-dispute to select and appoint arbitrators post-dispute. I say more important because in the Flores-like context, the parties agree to appointment of at least one neutral arbitrator whom they expect will be disinterested, independent, and otherwise unbiased.
As the Flores Second Circuit arbitration decision demonstrates, it doesn’t matter what the parties agreed or knew about the agreement-designated decision maker at the time they entered into the agreement. The agreement will not, under Flores, be subject to FAA protection even though the parties agreed otherwise or waiver or forfeiture rules would support an argument that the parties waived or forfeited any otherwise applicable neutrality requirement. Put differently, Flores suggests that, at least when it comes down to the making of an agreement to arbitrate, the parties must agree to an independent and disinterested decisionmaker—whether, for example, a single neutral arbitrator, a panel of three neutral arbitrators, or two partisan arbitrators and one neutral arbitrator.
But what happens when the parties agree pre-dispute to the selection of a disinterested and independent arbitrator, a dispute arises, and an arbitrator is selected (without the knowledge of at least one of the parties) that is not (or would not be) disinterested, independent, or both? Whether an award challenger may prevail does not always turn on whether the conflict of interest is a disqualifying interest in the outcome or a lack of independence, but on whether challenging party allegedly waived the conflict of interest, either by the terms of their predispute arbitration agreement or through the disclosure process.
Regretfully, waiver battles arising out of the disclosure process are sometimes grounded in gamesmanship perpetrated by certain parties or their counsel. The object of the game is to disclose as little as possible under circumstances that discourage objections, and otherwise to create a record under which inadequate, untimely objections can plausibly argued to be adequate, even though the evidence preponderates otherwise. The understandable tendency of Courts to give award proponents the benefit of the doubt makes the games easier to win, and encourages further gamesmanship.
One promising aspect of the Flores Second Circuit arbitration decision is that it strongly suggests neutrality and its components—especially independence and disinterestedness— are not waivable. That should be true not only for dispute resolution agreements like the one at issue in Flores, but also for ordinary, pre-dispute arbitration agreements that provide for post-dispute selection of a neutral arbitrator.
Flores Second Circuit Arbitration Decision: Conclusion
The Flores Second Circuit arbitration decision serves as a powerful reminder that arbitration clauses must provide a truly neutral and independent forum to gain protection under the FAA. By holding that the NFL’s provision was “arbitration in name only,” the court reinforced the importance of procedural fairness, arbitrator independence, and the effective vindication of statutory rights. For practitioners, Flores underscores both the limits of drafting one-sided dispute resolution agreements and the enduring vitality of the effective vindication doctrine.
Contacting the Author
If you have any questions about this article, arbitration, arbitration-law, or arbitration-related litigation, then please contact Philip J. Loree Jr., at (516) 941-6094. PJL1@LoreeLawFirm.com.
Philip J. Loree Jr. is principal of the Loree Law Firm, a New York attorney who focuses his practice on arbitration and associated litigation. A former BigLaw partner, he has 35 years of experience representing a wide variety of corporate, other entity, and individual clients in matters arising under the Federal Arbitration Act, as well as in insurance- or reinsurance-related, and other, matters.
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Tags: 42 U.S.C. § 1981 claims, arbitration enforceability, arbitration fairness doctrine, arbitration in name only, arbitration independence, arbitration jurisprudence, arbitration law blog, arbitration neutrality, Brian Flores lawsuit, drafting arbitration clauses, effective vindication doctrine, employment discrimination arbitration, Evident Partiality, Federal Arbitration Act (FAA), Flores v. New York Football Giants, Hooters v. Phillips arbitration case, Mitsubishi Motors arbitration, NFL arbitration, NFL Commissioner arbitration power, NFL Constitution arbitration provision, NFL Management Council v. NFL Players Association, Second Circuit arbitration decision, sports arbitration, sports law and arbitration, Viking River Cruises arbitration, workplace arbitration
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